Plans to end the way international gas prices push up electricity prices across Great Britain have taken “a major step forward” as the UK government unveils new measures to shield households and businesses from future energy shocks.
The government has outlined a package designed to reduce the impact of volatile gas markets on electricity prices and provide greater stability for consumers.
This will be done through “voluntary long term fixed contracts” offered to existing low‑carbon generators that are not currently on fixed‑price deals, covering around a third of Britain’s power supply.
According to the announcement, “this will help protect families and businesses from higher bills when gas prices spike, with contracts offered only where they deliver clear value for money for consumers.”
An “updated Electricity Generators Levy” will also raise the tax on excess profits from 45% to 55%, “ensuring an increased proportion of the extraordinary revenues generated when the gas price spikes is available to government to support businesses and households with the impacts of the conflict in the Middle East on the cost of living.”
The statement makes clear that recent instability has underlined the UK’s exposure to international gas markets.
To “shield families from future wars, geopolitical tensions or supply shocks”, ministers say they want to reduce “the impact that volatile gas prices have on the price of electricity.”
Officials argue that the new measures “will further reduce the share of electricity exposed to gas price shocks and provide generators with the economic incentive to move on to fixed contracts not linked to volatile gas.”
They add that “the government is monitoring the impact of the current crisis on energy bills and will be ready to step in to provide targeted support where necessary.”
Starmer: “Get off the fossil fuel rollercoaster”
Prime minister Keir Starmer framed the move as part of a wider push to deliver a more stable and homegrown energy system for the UK.
“We need to get off the fossil fuel rollercoaster – this will make energy bills more stable and take the pressure off family budgets,” he said.
Starmer argued that consumers should not be left carrying the full cost of global gas volatility.
“When global gas prices spike, people here shouldn’t be picking up the tab. Our focus is simple: easing pressure on household budgets now, while building a homegrown energy system that protects families from global instability in the years ahead.”
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Miliband: “The era of clean energy security must come of age”
Energy secretary Ed Miliband linked the reforms directly to the government’s broader clean energy mission and the lessons of recent crises.
“As we face the second fossil fuel shock in less than 5 years, the lesson for our country is clear: The era of fossil fuel security is over, and the era of clean energy security must come of age,” he said.
Miliband said this shift underpins both energy security and lower bills over the long term.
“That’s why we’re doubling down on clean power, to give our country energy security and bring down bills for good.”
